Assorted pundits, public intellectuals and economists are wringing their hands in despair over the declining quality of political debate in the run-up to the 2019 elections. They additionally fret about the ability of the exchequerto fund the largesse being promised by various parties to voters. But the hand-wringing is pointless when we fail to see what needs fixing: we have a broken state, and elections are really about how to capture power for the benefit of a chosen few. And when the state is broken, markets will be commandeered to serve the interests of those who fund politicians. So, before we talk of economic or any other reform, we need to fix the state.

The Chanakya sutra is a useful source of wisdom in this regard. The first four segments of it are particularly relevant and instructive. They read: Sukhasya moolam dharmah; Dharmasya moolam arthah; arthasya moolam rajyam; rajyasya moolam indriyajayah (happiness is based on upholding dharma; dharma is based on wealth and economic health; wealth is based on the state; and the state’s stability depends on control of the senses).

This may sound quaint in today’s world, but if one adjusts for the kind of society and economic and political structures that prevailed in Chanakya’s time, a common sense rendering of the sutra today would read something like this: “The well-being of the people depends on upholding a just social order (note: dharma is not religion in this context); order depends on wealth and productive economic activity; economic activity depends on a strong and limited state; and a strong state needs strong institutions so that it does not act arbitrarily or whimsically."

Note that artha (wealth) is only one small part of the sutra. It is a necessary condition for a state and its people to be happy, but not a sufficient one in itself. This implies that there are more things we need to fix than just our economy.

In his recent book, The Third Pillar, former RBI governor Raghuram Rajan contends that the state and markets (the other two pillars) have grown more powerful while the community pillar has weakened in the West. In our case, we have not fixed the basics of the state and markets, and our electoral impulses allow small groups or communities to capture and suborn the state for narrow ends. Fixing this skew means non-economic reforms must be given greater priority in our scheme of things than mere economic reforms. Non-economic institutions need greater independence than a Reserve Bank here or a Competition Commission there. Here are three key areas for political and constitutional reform that may need to precede greater economic reform.

1. The first thing we need to fix is law and order, maintaining which is a state’s primary duty to citizens. This means not only the police and the criminal justice system, but also the judiciary. If the entire system is not insulated from political control, we are not going to have any rule of law. Judicial independence does not mean judges appointing themselves; that too is a perversion. This change can only happen through legislation to strengthen existing institutions (or create new ones) by insulating them from political influences.

2. We also need greater devolution of power from the centre to states, and from states to local bodies. India’s Constitution is a mess of conflicting provisions, including a concurrent list where both the centre and state can legislate. As politics has become more regional, some political and economic power has indeed shifted to states, but cities are still powerless to design their own future. We need to scrap the concurrent list, and devolve more economic power to the lowest possible political levels. If a third front ever comes to power in Delhi, it does not matter if its constituents have no common policy. One common thread that should unite them is the need for big constitutional changes than devolve power away from Delhi. Some 1.36 billion people can’t be governed effectively from Delhi; and several million cannot be ruled from state capitals.

3. Electoral reform is the last of the most important non-economic reforms we need to think about. This includes state funding of candidates, bringing transparency to political party funding, and reworking constituencies so that all constituencies are roughly the same size. The electoral bonds scheme for funding political parties with “white" money does nothing to really clean up the swamp of corrupt money that seeks to influence policies.

Our state-wise Lok Sabha seat allocations are based on population figures from the 1970s. We thus give greater representation to the southern states, and less to the populous ones in the north. The logical way to rework this is to give more Lok Sabha seats to the more populous states, and compensate the states which lose out with a higher quota of Rajya Sabha seats, so that they have more blocking power in the Upper House. No democracy can be sustained if the value of one vote in Uttar Pradesh is far less than one vote in the south.

The state needs fixing in many ways, but the above three are crucial. We need political and constitutional reforms more than just economic reforms. Once the former happen, others will follow.